Link between the company and the outside world

The secretary acts as a link between the company and the outside world.
The ostensible authority of the company secretary to bind the company by his acts arises from the company’s relationship with the outside world. If the company represents to
outsiders that the secretary has the necessary authority to enter into contracts on behalf of the company, then the company shall be liable to third parties who have acted on such representations

The third parties can hold the company liable for such contracts provided it can be provided that
(i) a representation was made to outsiders that the company secretary had the authority to enter into such a contract;
(il) the representation was made by a person having actual authority to do so;
(iil) the outsider was actually induced to make the contract and he relied upon it;
(iv) the contract was within the powers of the company; and
(v) such powers were validly delegated to the secretary.
Even though a company secretary enjoys a unique position in the management hierarchy, it cannot be assumed that he has managerial powers. Actually, the secretary has no role in the formulation of policies, which is the function of the Board. He cannot be regarded as equal to a manager performing managerial functions. There is a distinct difference in the sphere of these functions. That is why, a company secretary is not included among ‘managerial personnel’ within the meaning of Section 197-A of the Companies Act and his remuneration is not taken into account for the purpose of calculating overall managerial remuneration under Section 198 of the Act.
However, as an agent of the company, managerial powers can be delegated to the secretary by the company and/ or the Board of Directors. There is nothing in the Act to prevent the Board to delegate him wider powers. But without such delegation, the secretary has no authority to exercise managerial powers. He cannot bind the company unless he has been expressly authorised with such powers.
The company secretary cannot exercise the following powers unless he has been
properly authorised:
(i) to allot shares or to register a transfer of shares;
(ii) to convene a meeting of the company;
(iii) to borrow money on behalf of the company;
(iv) to acknowledge a debt in any suit against the company; and
(v) to make an application to Company Law Board forrelief in cases of oppression
and mismanagement.
In conclusion, it can be said that a company secretary has no authority to make any representations or to enter into contracts on behalf of the company without express authority from the company or the Board. He shall be personally liable to third parties for representations for which he has no proper authority.
“The post of the secretary is what the company and the individual make of it.” Explain and discuss the statutory duties of a company secretary.